EC forecasts Czech economy will contract by 6.2 pct in 2020

06-05-2020

The European Commission estimates Czech economic growth will drop by 6.2 percent this year due to measures to contain on the spread of the novel coronavirus, a steeper drop than during the 2009 global financial crisis.

In its regular spring macroeconomic estimate, the EU executive arm writes that apart from a decline in production, the export-oriented Czech economy will also suffer due to reduced foreign demand. Real GDP is expected to gradually recover in 2021 but not rebound to 2019 levels.

Czech unemployment is expected to rise to around 5 percent next year, while inflation should fall slightly, mainly due to declining oil prices and lower demand. At the end of 2019, the unemployment rate stood at 2.9 percent.

By comparison, the European Union’s economy is expected to contract by a record 7.4 percent this year. Unemployment in the bloc on average could climb to 9 percent this year.